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Stock Market Today: Dow in Wild Ride to End Lower After Fed Hikes Rates

Stock Markets Sep 21, 2022 03:59PM ET
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By Yasin Ebrahim

Investing.com -- The Dow closed lower Wednesday, though swung wildly between gains and losses as the Federal Reserve raised interest rates and lifted its outlook on further rates hikes pointing to a period of higher for longer rates.

The Dow Jones Industrial Average slipped 1.7%, or 522 points, the Nasdaq was down 1.8%, and the S&P 500 fell 1.7%,

The Fed raised rates by 0.75% and signaled that there was more room to frontload rate hikes after forecasting rates to reach about 4.4% by year end, that is well above the 3.8% projected previously.  

"We've just moved into the very, very lowest level of what might be restrictive [territory]," Powell said Wednesday following the rate hike. "In my view, there's a ways to go." 

The Fed also projected that a recession may possibly be avoided despite its need to speed up rate hikes to bring inflation under control. But economists at Jefferies suggested that it was "hard to believe that the Fed is capable of pulling off such a delicate landing of the economy onto a gradual glidepath towards somewhat lower growth, only mildly higher unemployment, and on-target inflation."

Bond markets were quick to price in the growing risk of a recession as the Treasury yield curve further inverted. The 2-year treasury yield over 10-year Treasury yield inverted to beyond 50-basis points. 

The prospect of higher for longer interest rates weighed on growth sectors of the economy as tech and consumer discretionary fell more than 1%, with the latter dragged down by travel and leisure stocks amid rising geopolitical tensions.

Russian President Vladimir Putin announced the partial mobilization of Russian citizens for the war in Ukraine that likely ends any lingering hopes of a sooner rather than later end to the conflict.   

Caesars Entertainment Corporation (NASDAQ:CZR) fell by 8%, Las Vegas Sands Corp (NYSE:LVS) was down by more than 6% and Carnival Corporation (NYSE:CCL) slipped by nire than 6%.

Big tech, meanwhile, also faltered as Apple (NASDAQ:AAPL) pared gains from a day earlier, while Meta Platforms (NASDAQ:META) fell more than 2%.

Stitch Fix (NASDAQ:SFIX) closed almost 3% higher, though was up more than 15% intraday despite reporting a wider-than-expected loss in the fourth quarter as slowing global growth blunted consumer demand.

Wedbush cuts its price target on Stitch Fix to $5 from $7, warning that "visibility into a turnaround is extremely low right now," though said that the cheap valuation of the company was the "only reason" it wasn't more negative on the stock.

General Mills Inc (NYSE:GIS) shrugged off the broader market malaise, rising more than 5% after raising its outlook on performance following better-than-expected earnings

Stock Market Today: Dow in Wild Ride to End Lower After Fed Hikes Rates
 

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Comments (33)
Dennis Chuck
Dennis Chuck Sep 22, 2022 2:48PM ET
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S you powell!!
Mo Lm
Mo Lm Sep 21, 2022 9:19PM ET
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Planned crisis.
Ricky Singh
Ricky Singh Sep 21, 2022 9:04PM ET
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Market due for a run !!!Before it starts falling again before next hike
keerthi gowda
keerthi gowda Sep 21, 2022 8:59PM ET
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FED hikes by 75 bps.🔥(Inline with Expectations but Comments to hike 125 bps by December is not favourable)*Fed hints at another 125 bps hike till December and 25 bps early next year.*US yields move higher. USDINR hovering at 80 handle on spot reference*Fed Says* It Is Highly Attentive To Inflation Risks, Strongly Committed To Returning Inflation To 2%*Fed Says* Job Gains Have Been Robust, Unemployment Rate Has Remained Low*Fed Says* Recent Indicators Point To Modest Growth In Spending And Production*Fed Says* Inflation Remains Elevated, Reflecting Pandemic-Related Imbalances, Higher Food And Energy Prices, Broader Price Pressures*Fed Says* War In Ukraine Creating Additional Upward Pressure On Inflation, Weighing On Global Economic Activity*Fed Says* Prepared To Adjust Policy As Appropriate*Fed Says* Vote In Favor Of Policy Was Unanimous
Tom Michaels
Tom Michaels Sep 21, 2022 8:28PM ET
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Double BULL
Tom Michaels
Tom Michaels Sep 21, 2022 8:27PM ET
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BULL
Mo Lm
Mo Lm Sep 21, 2022 7:52PM ET
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Deamoncrats in charge!
Erikke Evans
Erikke Sep 21, 2022 7:29PM ET
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The "wild singing" mentioned at the beginning of the article is large traders clearing stops at the highs before dumping their shorts. Observe and make a ******next time.
Erikke Evans
Erikke Sep 21, 2022 7:29PM ET
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"swinging"
Ed Glass
EddieG Sep 21, 2022 7:05PM ET
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when Saudi s join BRIC block, us. dollar become worth less.
Mark Manley
Mark Manley Sep 21, 2022 7:04PM ET
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Really guys, you're censoring the names of famous despots now??? What's next, you gonna start burning books? Well, start with CRT textbooks used to attack and brainwash our children
Brad Albright
Brad Albright Sep 21, 2022 7:04PM ET
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Relax. Its a bad algorithm that catches way too many words. We now return you to your culture war.
 
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